Business Context and Reporting Period
Company: Shinhan Financial Group Co., Ltd. (SFG)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Quarter (1Q) 2026 (January 1 – March 31, 2026)
Filing Date: May 15, 2026
Context: SFG is a financial holding company listed on the Korea Stock Exchange and the NYSE (via ADRs). The report details consolidated financial results prepared under Korean International Financial Reporting Standards (K-IFRS).
Key Financial Metrics
| Metric (KRW) | 1Q 2026 | FY 2025 | FY 2024 |
|---|---|---|---|
| Net Interest Income | 3,024 billion | 11,695 billion | 11,402 billion |
| Net Operating Income | 2,155 billion | 7,023 billion | 6,459 billion |
| Consolidated Net Profit | 1,649 billion | 5,085 billion | 4,558 billion |
| Net Profit Attributable to Equity Holders | 1,623 billion | 4,972 billion | 4,450 billion |
| Earnings Per Share (Won) | 3,327 | 9,812 | 8,441 |
| Cash Dividend Payout Ratio | 21.49% | 25.06% | 24.45% |
| Dividend Per Share (Won) | 740 | 2,590 | 2,160 |
Capital and Liquidity
- BIS Ratio (Consolidated): 15.72% (as of March 31, 2026), down slightly from 15.94% at year-end 2025.
- CET1 Ratio: Maintained above 13% (specific 1Q 2026 figure not explicitly stated in summary, but target is ≥13%).
- Liquidity Coverage Ratio (Shinhan Bank): 106.0% (exceeds 100% regulatory minimum).
- Debt to Equity Ratio (Separate Basis): 40.78% (March 31, 2026).
Asset Quality
- Non-Performing Loan (NPL) Ratio: 0.72% (up from 0.64% in Dec 2025).
- Substandard & Below Ratio: 0.83% (up from 0.74% in Dec 2025).
- Substandard & Below Coverage Ratio: 112.87% (down from 126.55% in Dec 2025).
Material Changes vs. Prior Period
- Profitability: 1Q 2026 consolidated net profit of KRW 1.649 trillion reflects seasonal quarterly performance. Year-over-year comparison is not directly provided for 1Q 2025 in the text, but FY 2025 full-year profit was KRW 5.085 trillion.
- Asset Quality Deterioration: The NPL ratio increased to 0.72% from 0.64% at the end of 2025, and the coverage ratio for substandard loans decreased to 112.87% from 126.55%.
- Dividend Policy: The company declared a quarterly cash dividend of KRW 740 per share for Q1 2026, with a record date of April 30, 2026.
- Auditor Change: The external auditor changed from KPMG Samjong Accounting Corp. to PWC Samil Accounting Corp. for FY 2026 due to the expiration of the previous audit contract term.
Guidance, Outlook, and Management Commentary
Shinhan Value-Up +++ (Triple Plus) Plan
On April 23, 2026, the Board adopted a new value-up plan named "Shinhan Value-Up +++" with the following targets:
- ROE: Target of 10% or more (range 10–12%).
- Shareholder Return Ratio: 50% or more, with a predictable policy formula.
- CET1 Ratio: 13% or more.
Strategic Priorities: Strengthening the ROTCE-ROC value chain to improve ROE achievability and reviewing shareholder return mix strategies considering tax reforms and Price-to-Book Ratio (PBR) trends.
Risks and Contingencies
- Asset Quality: Rising NPL ratios and declining coverage ratios indicate increased credit risk exposure.
- Regulatory Changes: Liquidity ratios for insurance subsidiaries were impacted by amendments to the Insurance Business Supervision Regulations narrowing the scope of liquid assets.
- Contingencies: Refer to Exhibit 99.1 Note 29 for detailed commitments and contingencies.
Investor Verification Checklist
- Asset Quality Trend: Verify the drivers behind the increase in the NPL ratio (0.72%) and the decline in the coverage ratio (112.87%) compared to year-end 2025.
- Dividend Sustainability: Confirm the cash flow adequacy to support the new "Value-Up +++" target of a 50%+ shareholder return ratio.
- Auditor Transition: Review the initial audit opinion from the new auditor (PWC Samil) for any qualifications or emphasis of matter.
- Capital Adequacy: Monitor the CET1 ratio to ensure it remains above the 13% target amidst potential loan growth or provisioning needs.
- Related Party Exposures: Review the detailed breakdown of the KRW 4.3 trillion in loans to subsidiaries and the top 20 borrower exposures (totaling KRW 32.9 trillion).